DCIT, CHENNAI V. Naramda Chemicals P. Ltd., Pondicherry

ITA 305/CHNY/2015

• Counselvise Citation: 30521714 RSA 2015
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 11-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 04-02-2015
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNANJCIT
• Assessee Lawyers: G BASKAR
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.305 /MDS./2015 ( ! '! / ASSESSMENT YEAR :2007-08) DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I(2), 46,NUNGAMBAKKAM HIGH ROAD, CHENNAI. VS. M/S.NARMADA CHEMICALS P. LTD., NOW KNOWN AS M/S.POWER CHEMICALS P. LTD., R.S.NO.94/1,SEMBLAMBALAYAM VILLAGE, KOKADU PO, PONDICHERRY 605 110. PAN AABCN 2036 R ( / APPELLANT ) ( / RESPONDENT ) #$ % & / APPELLANT BY : MR.P.RADHAKRISHNAN,JCIT D.R '(#$ % & / RESPONDENT BY : MR.G.BASKAR,ADVOCATE ) * % +, / DATE OF HEARING : 11.06.2015 -' % +, /DATE OF PRONOUNCEMENT : 11.08.2015 ITA NO.305 /MDS/2015 2 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE , AGGRIEVED B Y THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-II, CHENN AI DATED 17.01.2014 IN ITA NO.766/13-14/A-IV PASSED UNDER S EC.143(3) READ WITH SEC.147 & SEC. 250 OF THE ACT. 2. THE REVENUE HAS RAISED FOUR ELABORATE GROUNDS I N ITS APPEAL; HOWEVER THE CRUX OF THE ISSUE IS THAT THE REVENUE I S AGGRIEVED BY THE ORDER OF THE LD. CIT (A), WHO HAD ALLOWED HIGHER RA TE OF DEPRECIATION FOR THE WINDMILL AT 80% OF THE WRITTEN DOWN VALUE B Y FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE M/S.K.K.S.K.LEATH ER PRODUCTS LTD. (2010) REPORTED IN 126 ITD 215 AS AGAINST THE DEPRE CIATION ALLOWED BY THE ASSESSING OFFICER AT 7.69%. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF SOAPS, DETERGENTS, SULPHURIC ACID AND POWER GENERATION FROM WIND MILL, FILED ITS RETURN OF INCOME ON 30.10.2007 DECLARING TOTAL INCOME AT NIL AFTER CLAIMING ITA NO.305 /MDS/2015 3 DEDUCTIONS.THE ASSESSMENT U/S.143(3) WAS COMPLETED ON 07.12.2009. HOWEVER, THE CASE WAS REOPENED AND RE A SSESSMENT WAS MADE ON 22.3.2013 WHEREIN THE LD. ASSESSING OFF ICER HAD DISALLOWED THE CLAIM OF DEPRECIATION @ 80% BY THE A SSESSEE AGAINST THE WINDMILL SINCE THE ASSESSEE HAD NOT COMPLIED WI TH SECOND PROVISO TO RULE 5(1A) OF THE INCOME TAX RULES,1962 BY EXERCISING THE OPTION FOR CLAIMING HIGHER DEPRECIATION BEFORE THE DUE DATE OF FURNISHING THE RETURN OF INCOME. HOWEVER, ON APPEAL THE LD. CIT (A) FOLLOWING THE ORDER OF THE CHENNAI BENCH TRIBUNAL I N THE CASE M/S.K.K.S.K.LEATHER PRODUCTS LTD. REPORTED IN [2010 ] 126 ITD 215 HELD THE ISSUE IN FAVOUR OF THE ASSESSEE BECAUSE IN THE AFORESAID CASE THE CHENNAI BENCH OF THE TRIBUNAL HAD HELD THA T WHEN THERE IS NO SPECIFIC FORM OR METHOD PRESCRIBED FOR EXERCISIN G THE SAID OPTION THEN THE CLAIM MADE IN THE RETURN OF INCOME AS WELL AS REFLECTED IN THE BOOKS OF ACCOUNTS AND AUDIT REPORT FILED ALONG WITH THE RETURN OF INCOME IS MORE THAN THE EXERCISE OF THE OPTION AS R EQUIRED UNDER THE SECOND PROVISO TO RULE-5(1A). AGGRIEVED BY THE ORDE R OF THE LD. CIT (A) THE REVENUE IS NOW IN APPEAL BEFORE US. ITA NO.305 /MDS/2015 4 4. AT THE OUTSET, THE LD. A.R. SUBMITTED THAT THI S ISSUE IS COVERED BY THE DECISION OF THE CHENNAI BENCH OF THE TRIBUNA L IN THE CASE OF M/S.K.K.S.K.LEATHER PRODUCTS LTD.(SUPRA) AND REQUES TED THAT THE ORDER OF THE LD.CIT(A) MAY BE UPHELD. LD. D.R ON T HE OTHER HAND, ARGUED IN SUPPORT OF THE ORDER OF THE LD.A.O. 5. AFTER HEARING BOTH THE SIDES, WE FIND THAT THE LD. CIT (A) HAD RIGHTLY DECIDED THE ISSUE BY FOLLOWING THE DECISION OF THE CHENNAI BENCH OF THE TRIBUNAL CITED HEREIN ABOVE BECAUSE IN THE CASE OF THE ASSESSEE THE CLAIM WAS MADE IN THE RETURN OF INCOME AS WELL AS REFLECTED IN THE AUDIT REPORT FILED ALONG WITH THE RETURN OF INCOME, THEREFORE IT WOULD AMOUNT TO EXERCISE OF THE OPTION AS REQUIRED UNDER SECOND PROVISO TO RULE-5(1A) AND ACCORDINGLY DEPREC IATION @ 80% ON THE WINDMILL OF THE ASSESSEE HAS TO BE ALLOWED. FURTHER THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF C IT VS. ABT LTD. REPORTED IN [2015] 370 ITR 159(MAD.) HAS HELD AS UN DER:- IF THE ASSESSEE EXERCISED THE OPTION IN TERMS OF TH E SECOND PROVISO TO RULE 5(1A) OF THE INCOME-TAX RULES, 1962, AT THE TIME OF FURNI SHING OF RETURN OF INCOME, IT WILL SUFFICE AND NO SEPARATE LETTER OR REQUEST OR INTIMA TION WITH REGARD TO OF EXERCISE OF OPTION IS REQUIRED. SINCE THE RETURNS WERE FILED I N ACCORDANCE WITH SECTION 139(1) OF THE INCOME-TAX ACT, 1961, AND THE FORM PRESCRIBE D THEREIN MAKES A PROVISION ITA NO.305 /MDS/2015 5 FOR EXERCISING AN OPTION IN RESPECT OF THE CLAIM OF DEPRECIATION, NO SEPARATE PROCEDURE IS REQUIRED. IN THESE CIRCUMSTANCES WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT (A). ACCORDINGLY, WE HEREBY C ONFIRMED THE ORDER OF THE LD. CIT (A). 6. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED ON 11 TH AUGUST, 2015 AT CHENNAI. SD/- SD/- ( . . . ) ( N.R.S.GANESAN ) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 11 TH AUGUST, 2015. K S SUNDARAM. % '+./ 0 /'+ /COPY TO: 1. #$ /APPELLANT 2. '(#$ /RESPONDENT 3. ) 1+ () /CIT(A) 4. ) 1+ /CIT 5. /4 '+5 /DR 6. 6! 7* /GF